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The volume of notes outstanding at the end of each month, with the current tax rates, is stated in the following

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The currency was issued to forty-one different associations, which were organized in forty States. The emergency currency issued last year has practically all been retired; less than $500,000 remain to be automatically retired by reason of the expiration of the Aldrich-Vreeland statute. In the event of another emergency similar to that which occurred in August, 1914, the notes of the federal reserve system will serve precisely the same purpose as those issued under the Aldrich-Vreeland law. Section 10 of the Federal Reserve Act provides that notes are to be issued under the same conditions as those issued by the National banks, ex-. cept that the issue of notes is to be limited to the capital stock of each federal reserve bank.

It may be added that all the federal reserve notes have been printed.

GOLD SETTLEMENT FUND

July 1, 1915, the Federal Reserve Bulletin gave a summary of the gold settlement fund from May 19 to June 24, 1915, inclusive.

A total of $18,450,000 had been deposited up to the time of the second settlement, made on the morning of May 27, 1915. As a result of this settlement the balances of several federal reserve banks fell below the required amount of

$1,000,000 each, and additional gold deposits were made to the amount of $4,400,000, increasing the gold in the fund to $22,850,000. After the settlements of June 10 and 17 additional gold deposits were required, and the amount of gold held in the fund has thus been increased to $30,540,000, at which figure it stood at the close of business June 24, 1915.

Every Wednesday evening each federal reserve bank is required to telegraph to the Federal Reserve Board the amount due from it to each other federal reserve bank. These telegrams are in the hands of the board Thursday morning, and the figures given are then assembled on a sheet known as "the checkerboard," which has the names of federal reserve banks at the head of twelve columns and also at the left-hand margin. From the telegram of each bank the amounts which it reports due to other federal reserve banks are listed in the proper columns under the names of the other banks, the total being entered at the right margin, and each horizontal column thus shows amounts and total which the federal reserve bank owes to all the other reserve banks. When the figures from the twelve telegrams have been entered, the vertical columns show the amounts and total due from other federal reserve banks to the reserve bank named at the head of each column. Each bank is then charged with the amount due to other federal reserve banks and credited with the amounts due to it from them, the net amount to its debit or credit being carried to its account on the books of the gold settlement fund. A statement is telegraphed to each bank giving the amounts which other federal reserve banks report due it, and the net amount by which it is debtor or creditor at the clearing. Upon receipt of this telegram it charges the accounts of other federal reserve banks for the amounts it has reported due to them, and credits their accounts with the amounts which they have reported due to it, the obligations in each case having been extinguished by the operation of settling

and the transfer of title to gold held in the gold settlement fund.

The Federal Reserve Board has agreed to pay to the Treasurer of the United States from the gold settlement fund sums in multiples of $10,000 for the credit of any reserve bank's gold redemption fund with the Treasurer of the United States.

TRADE ACCEPTANCES AND BANKER'S ACCEPTANCES DEFINED

July 22, 1915, the New York Federal Reserve Bank defined trade acceptances and banker's acceptances in the following statement:

The trade acceptance is a draft drawn by one commercial house upon another commercial house, and payable by the latter, while the banker's acceptance is a draft drawn on a banker and payable by such banker. It carries with it the credit of the bank and sells readily in the open market at the lowest rates. The trade acceptance carries with it only the credit of a commercial house and the rate of three and onehalf per cent. just established, relates only to its rediscount at the federal reserve bank by a member bank.

TRADE ACCEPTANCES DISCOUNT AT THREE AND ONE-HALF PER CENT. BY NEW YORK FEDERAL RESERVE BANK

July 22, 1915, the New York Federal Reserve Bank established a rate of three and one-half per cent. for the rediscount by member banks of trade acceptances. This action was had by reason of the insistence of the officers of the New York bank. The former rate was four per cent.

"The establishment of a rate of three and one-half per cent. for double-name paper as against a four per cent. rate for ordinary rediscounts," said the New York board in its announcement, "is evidence of the desire of the bank to facilitate, wherever it may prove more advantageous and economic than present practice, the creation of paper drawn by the seller on the purchaser of goods."

It may be added that this is the first rate of the kind announced.

Members of the Federal Reserve Board in Washington stated that the rate was made lower than the ordinary commercial paper rate to encourage discounts of trade accept

ances.

A PLAN TO PROVIDE FOR TRANSFERS BETWEEN DISTRICTS

July 1, 1915, the Bulletin of the Federal Reserve Board made a statement to the effect that when the board had previously announced decisions in the redistricting cases it was stated that the decisions should become effective July 1, 1915. It was also stated that a plan would be made to provide a method of surrendering stock in the reserve banks from which the member banks were transferred, of taking out new stock in the reserve banks to which they were transferred, and of bringing about a settlement of capital stock and reserve accounts between the two federal reserve banks affected by each such transfer. June 16, 1915, forms of procedure were forwarded to the six federal reserve banks affected by the redistricting decisions, as follows:

SIR: Upon review of the decision of the Reserve Bank Organization Committee the Federal Reserve Board has entered an order effective from July 1, 1915, readjusting districts Nos. 4 and 5, as a result of which your bank will, after that date, be ineligible to hold stock in the Federal Reserve Bank of Richmond, but will be eligible to membership in the Federal Reserve Bank of Cleveland. In order to comply with the terms of the order referred to you are requested to have your board of directors adopt, on or before July 1, the inclosed resolutions covering surrender of your stock in the Federal Reserve Bank of Richmond and application for stock in the Federal Reserve Bank of Cleveland. When this has been done a certified copy should be forwarded to the Federal Reserve Bank of Cleveland. Two copies of the resolution are inclosed so that you may have a duplicate for your files.

For convenience the necessary operations have been arranged in the following order:

(1) Adopt the resolutions above referred to and send certified copy to the Federal Reserve Bank of Cleveland.

(2) Send to the Federal Reserve Bank of Cleveland, with a certified copy of the resolutions, all receipts issued and sent to you for payments made by you on account of your subscription to the capital stock of the Federal Reserve Bank of Richmond.

(3) Execute and send to the Federal Reserve Bank of Cleveland the necessary order authorizing the Federal Reserve Bank of Richmond to remit to the Federal Reserve Bank of Cleveland, on your behalf, the net amount hereinbefore paid by you on account of your subscription to the capital stock of the Federal Reserve Bank of Richmond. This payment will be applied by the Federal Reserve Bank of Cleveland on your subscription to the capital stock of said bank. Upon receipt of this payment the Federal Reserve Bank of Cleveland will execute and forward to you its temporary receipt for the amount so paid.

(4) At the close of business on June 30, 1915, for the purpose of transferring reserve balance from the Federal Reserve Bank of Richmond to the Federal Reserve Bank of Cleveland, please send to the Federal Reserve Bank of Cleveland for your credit your draft on the Federal Reserve Bank of Richmond for the balance as shown on your books.

(5) Please fill out Treasury Department Form B-2149 prescribing method of calculation of reserve as at the close of business June 30, 1915, and send it to the Federal Reserve Bank of Cleveland. The Federal Reserve Bank of Richmond will send statement of your account at the close of business June 30, 1915, and will reconcile it in the usual

manner.

(6) Inasmuch as the six per cent. dividend provided for by statute is cumulative, the Federal Reserve Bank of Richmond will issue to you an accrued dividend certificate. This certificate will entitle you to receive interest on your cash-paid subscription at the rate of six per cent. per annum, to be computed from the dates of your cash payments to the date of the surrender of your stock, and to be paid to you when the earnings of the Federal Reserve Bank of Richmond justify the payment of accrued dividends to its stockholders.

Kindly note that all of the above papers are to be sent to the Federal Reserve Bank of Cleveland.

Respectfully,

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At a meeting of the board of directors of the duly called and held on the

day of

lowing resolution was offered and duly adopted:

Governor.

Governor.

of

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"Whereas this bank has subscribed to ital stock of the Federal Reserve Bank of Richmond, pursuant to a resolution adopted by its board of directors on the

day of

1914, in accordance with the provisions of the Act of Congress approved December 23, 1913, and known as the Federal Reserve Act, has paid on account thereof in installments the sum of $

said sum being 50 per cent. of the par value of said shares;

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